England and Wales High Court (Administrative Court) Decisions

Queen on the Application of OXFORD STUDY CENTRE Ltd. v. BRITISH COUNCIL [2001] EWHC Admin 207 (19th March, 2001)

Case No: 2839/00

Neutral Citation Number: [2001] EWHC ADMIN 207

IN THE HIGH COURT OF JUSTICE

QUEENS BENCH DIVISION

ADMINISTRATIVE COURT

Royal Courts of Justice

Strand,

London, WC2A 2LL

Monday 19^th March 2001

MR JUSTICE COLLINS:

1. The claimant operates a language school in Oxford which teaches English to foreign students. The defendants run a scheme whereby they give accreditation to such schools so that potential students can know that they can expect a good standard if they choose that particular school. Accredited schools are also able to make use of the promotional facilities provided by the defendants so that their existence and advantages can be drawn to the attention of those who might want to come to this country to learn or improve their English.

2. The defendants have produced a handbook which explains the scheme and sets out the rules under which it operates. A scheme was originally operated by the Department of Education, but that ceased in 1982. Subsequently, the present scheme was initiated by an agreement made between the defendants, the Association of Recognised English Language Services (ARELS) and the British Association of States English Language Teaching (BASELT). It is known as the English in Britain Accreditation Scheme. Its aim is stated as follows:-

"The aim of the English in Britain Scheme is to protect international students studying or planning to study English as a foreign language in the U.K. by offering access to a range of services which meet agreed quality standards.

The standards set by the Scheme are agreed through consultation with members and the professional organisations (ARELS and BASELT) which represent them."

The benefits of the Scheme to students and members are identified. Those to members include the rights to use the British Council logo and facilities, which is an obvious selling point to overseas students. The Board which administers the scheme includes, as a non-voting member, a representative from the Foreign and Commonwealth Office.

3. Accreditation is granted or withdrawn and the scheme administered by the defendants through their Accreditation Board. The Board will award or withdraw accreditation following recommendations from its Advisory Committee. Schools or other bodies which are or wish to be accredited will be inspected by inspectors who report back to the Advisory Board. Inspectors are appointed by the Board and are expressed to include:-

"those from appropriate state or private sector institutions, freelance specialists and those with other relevant areas of expertise."

4. The day to day administration of the scheme is carried out by a body known as the Accreditation Unit. The manager is Cherry Gough. The Unit is responsible for deciding which members (usually two in number) of those on the panel of inspectors are to be responsible for any particular inspection. If withdrawal of accreditation results from an inspection, there is a right of appeal to a committee consisting of a member of the Accreditation Scheme Advisory Committee or an independent expert in the field of English as a foreign language, a representative of BASELT or ARELS or a body appropriate to the appellant and an independent expert. Cherry Gough is Secretary to the Appeal Committee.

5. Following concerns about weaknesses in various aspects of its activities in 1996, a full inspection of the claimant was ordered for 1997. This inspection resulted in a withdrawal of accreditation, but this was set aside on appeal on the ground that it was a borderline case and the claimant should be given the chance to improve itself. A `spot check' was ordered and this took place in 1998. Again withdrawal of accreditation resulted, but again an appeal was allowed. But it was made clear that this was only because in the view of the appeal committee the inspectors should and may not have carried out their inspection without knowledge of the previous findings, by which they might have been prejudiced. Further, it was considered that insufficient time may have been allowed to the claimant to introduce and put into effect the necessary improvements. The claimant was told that on the occasion of the subsequent spot check, which was to take place, if it did not demonstrate acceptable standards, immediate withdrawal of recognition would be recommended.

6. The spot check took place in July 1999. It was concerned particularly with academic management and learning and teaching, the two areas in which weaknesses had been found to exist. The inspectors concluded that in neither area had the claimant reached a proper standard and that improvements which had been recommended following the previous inspections had not been put in place. Withdrawal of accreditation was therefore recommended. The claimant appealed. On 17 April 2000 there was an appeal hearing. By a majority the appeal was dismissed. The member in the minority was Mr. Josephs, who had been nominated by the claimant.

7. The claimant complained that one of the inspectors, Ms. Ulla Holmer, had no formal teaching qualifications. She had been an inspector since 1981 and had built up a considerable experience. She was particularly concerned with and interested in welfare. Her co-inspector, Ms. Joy Pascoe, did have relevant qualifications. Thus, it was alleged, it was a mistake to appoint Ms. Holmer as one of the inspectors when the spot check inspection was concerned with `academic management' and `learning and teaching'. The appointment was the responsibility of the Unit of which Cherry Gough was manager, although it appears that the actual appointments in this case were made not by her but by her deputy.

8. As secretary of the appeal committee, Cherry Gough attended the appeal and took notes. In her witness statement she says:-

"Depending on the wish of the committee, I either remain during their deliberations or I leave. I play no part in discussing the merits of the decision. I take rough notes of what takes place. I advise the Committee on matters of procedure and answer questions of a factual nature about the Council's practice and policies. "

The claimant was represented by its managing director, Ms. Philip. She objected to Cherry Gough remaining with the committee during their deliberations because Ms. Philip believed she had been responsible for appointing Ms. Holmer and would be biased against the claimant. The Committee overruled the objection and Cherry Gough remained with them.

9. In the course of the hearing, Ms. Philip had stated that she had regarded Ms. Pascoe as `a stooge' who did not seem to count during the inspection and that, when she had learnt of Ms. Holmer's lack of qualifications, she had been amazed and would have objected to her. Her complaint was that Ms. Holmer's lack of qualifications mean that she would be unable to judge whether the claimant did fail to reach adequate standards in the two areas which were in issue. That was clearly the thrust of her complaint. Mr. Josephs agreed. He believed that Ms. Holmer's lack of qualifications invalidated the inspection. In his witness statement, he says:-

"The British Council requires all teachers in accredited schools to have TEFL [Teaching English as a Foreign Language] qualifications and an education equivalent to a first degree. Ms. Holmer ... not only had no TEFL qualifications, she also had no degree of any kind and, what is worse, no teaching experience of any kind. She was, therefore, not competent to say that qualified teachers were incompetent. She might have been qualified to deal with questions of student welfare and social activities, but, as I stated during the appeal, it is patently absurd for a person with no formal education, no teaching qualifications and no teaching experience to pass such a severe judgment on qualified teachers that the school employing them is likely to be put out of business. "

That was his view. It was not in the end shared by the other two members of the committee. The view that experience enables an inspector to give valid opinions is not irrational. Nevertheless, Mr. Josephs' view was obviously tenable and so it was important that the committee should not be influenced by any considerations which were not raised in the course of the hearing.

10. Cherry Gough made notes of the discussion while the committee was considering its findings. This shows Mr. Josephs arguing that Ms. Holmer's lack of qualifications made the inspection invalid, but the other two members arguing that her experience was sufficient. Cherry Gough was asked to and did explain about recruitment procedures. But the chairman, Professor Ronald White, is recorded as expressing concern that to require a further reinspection would bring the scheme into disrepute. Cherry Gough (it seems without being asked) made the following observations:-

"If this inspection [is] invalid, Ulla Holmer would have to be removed from [the] panel."

11. On 19 May 2000, the chairman wrote a formal letter recording the Appeal Committee's decision dismissing the appeal. In that letter, Professor White says:-

"After due consideration, the Committee concluded that the school fell short in respect of the areas of concern in academic management and learning and teaching which had been brought to the school's attention by the inspectors, and therefore agreed with the ASAC's decision to withdraw accreditation from Oxford Study centre. This decision was reached by a majority of 2:1, Ron White and Graham White being in favour and Ian Josephs being against.

The Committee noted that following the spot check in July / August 1998 and the subsequent appeal held in April 1999, specific areas for improvement had been identified. All members of the Appeal Committee were disappointed to find that some of the recommendations in the letter of April 1999 and not been implemented. Mrs Philip admitted to the Committee that this was the case, specifically relating to lack of written feedback on teacher observations and lack of teachers' lesson plans.

However, Mrs Philip challenged the status of Ulla Holmer, one of the spot check inspectors, on the grounds that she lacked formal TEFL qualifications. Ian Josephs supported Mrs Philip in this challenge. He felt that the inspector's lack of formal TEFL qualifications and a university degree of any kind of higher education achievement invalidated the spot check. He was surprised when both Ron White and Graham White responded to this suggestion with the objection that, if the spot check was invalidated on the grounds of the inspector's lack of qualifications, then the result would be that all her previous inspections would also be invalid which would be complicated. This he felt was no concern of Mrs Philip and irrelevant to her case.

To clarify the issue of inspectors' qualifications, the Committee requested advice from the Head of the Accreditation Unit, and were told that within the period concerned, no specific qualifications were specified for inspectors. Ron White an Graham White accepted that, as this was the case, it was not appropriate to impugn the validity of either the current or previous inspections carried out by Ms. Holmer.

Ian Josephs also expressed the view that the inspectors had been remiss in failing to ascertain whether there had been any complaints from parents, students or teachers during summer 1999. Mrs Philip confirmed to the Committee that during summer 1999 there had been only one complaint relating to a Polish student described in advance of the course as being aged twelve years, though on arrival he turned out to be aged ten years.

Finally, Ian Josephs felt that the inspectors had judged the school on their feelings and impressions rather than on facts which they should have been able to ascertain by more targeted questioning. On the contrary, Ron White and Graham White were satisfied that the inspectors' judgements had been made on the basis of adequate evidence. "

The important sentence is that which records Mr. Josephs' surprise when the other two members responded with the objection that the result of invalidating the inspection on the ground of lack of qualifications on the part of Ms. Holmer would mean that "all her previous inspections would also be invalid which would be complicated". That was not a matter which should properly have been taken into account in considering the appeal. It is apparent that Cherry Gough's observations at the very least contributed to this way of thinking. While as a general rule there could be no objection to Cherry Gough, as Secretary, remaining with the committee, in this case it was particularly necessary, since objections had been raised, that she should be careful not to do or say anything which could be regarded as contributing to the discussion.

12. Mr. Josephs has stated that he believed that Professor White was inclined to agree with his point of view until Cherry Gough pointed out the difficulties that would cause. Professor White was unaware of that evidence when he made his statement, but he says that it appeared to him that the inspector's qualifications were being used to divert attention from the main issues, namely the quality of the claimant's academic management and teaching. He decided to dismiss the appeal because he was satisfied from the inspectors' report and what had been said by Mrs Philip at the hearing that the claimant did not deserve to continue to be accredited. Cherry Gough herself says that her comment was merely intended to indicate that lack of formal qualifications was no bar to appointment as an inspector.

13. This has led Mr. Lynch to submit that, since Ms. Holmer was a properly appointed and experienced inspector, and since the appeal was not a challenge to Cherry Gough's decision, there can be no reason to complain of the process by which the decision was reached. In any event, the decision could not have been affected by anything said by Cherry Gough. I am afraid I disagree. It seems to me that, whether or not Mr. Josephs is correct in his assertions that Professor White was wavering, he clearly believed that the lack of qualifications made her report unsatisfactory and unreliable. At the very least, her observations led the Committee to consider an irrelevant matter, as is apparent from the letter of 19 May 2000. It seems to me that it is quite impossible to argue in those circumstances that her observations could not have affected the result. What took place was unfair since a matter was raised which Ms Philip had not had an opportunity to deal with and which was in any event irrelevant.

14. However, that does not necessarily mean that the claimant succeeds. Mr. Lynch has submitted that judicial review is not an appropriate remedy. The defendants, he submits, do not have any public law functions and in any event the relationship between them and the claimant is purely contractual. Accordingly, any remedy will lie in the private law of contract and not in public law.

15. Miss White has set out in her skeleton argument some seven matters which she submits show that in running the scheme the defendants are performing a public function. She points to the public interest in maintaining standards, the fact that the scheme was, before being taken over by the defendants, run by the Department of Education and the encouragement of the government of the defendants' activities. The defendants' facilities are publicly funded (although the scheme itself is self-financing) and only accredited schools are promoted through them with the help of the British Embassies and tourist authorities. For many smaller schools, membership of the scheme is effectively a condition of being able to operate and recruiting agencies will often require that schools be accredited. Against this, entry into the scheme is purely voluntary. The evidence before me shows that only about 30% of EFL schools are accredited and that only about 50% of students enrol in such schools. While no doubt the scheme offers value to those who decide to join it, it is not a requirement that anyone should join and there is no suggestion that the government would without it impose some such scheme.

16. Where the source of a body's power is purely contractual, public law is less likely to apply. Indeed, before the decision of the Court of Appeal in R v Panel on Take-Overs and Mergers ex parte Datafin [1987] 1 QB 815, most practitioners would have believed that a contractual remedy meant that judicial review was inappropriate. However, if the body in question is performing a public function and contract does not provide the aggrieved person with a proper remedy, judicial review may well be appropriate. A good example of this is to be found in R v Lautro ex parte Ross [1993] QB 17. Lautro's powers were based on contract, but it was the body which regulated financial institutions which otherwise would be subject to some statutory control. Furthermore, it was able to affect some bodies or persons who were not members of it.

17. Nevertheless, the law has not gone so far as to regard all bodies which may have a role in voluntary regulation which is desirable and in the public interest as necessarily amenable to judicial review. A test suggested in R v Disciplinary Committee of the Jockey Club ex parte Aga Khan [1993] 1 WLR 909 is whether, to use Bingham LJ's words, the particular body or the exercise by it of the relevant functions has been "woven into a system of governmental control". The British Council in operating the scheme clearly does not meet that test. In R v Code of Practice Committee of the British Pharmaceutical Industry ex parte Professional Counselling Aids Ltd (1990) 3 Admin L.R. 697, Popplewell J reluctantly accepted that the committee was amenable to judicial review. That was because an adverse decision could mean that there was no market for a particular product and no other remedy was available. In the instant case, there is an adequate remedy in the law of contract, particularly as a term is to be implied that in considering any appeal the defendants will act fairly. There is in general no difference between the fairness to be required of a body exercising contractual powers of a disciplinary nature and that imposed upon a public body exercising similar functions. The only possible difference will be that in the former case, the body will be governed by specific contractual terms which may in some cases (but not here) permit practices which could otherwise be regarded as potentially unfair. If actually unfair, they may well not survive construction by the court.

18. In my judgment, the defendants are not amenable to judicial review when administering the scheme. Although no doubt it is in the interests of the potential students and of the public inasmuch as it helps to avoid exploitation, it is not a regulatory system which is in any way part of a system of governmental control. It is a purely voluntary scheme whereby those who choose to participate gain an advantage for their schools. If it had been amenable to judicial review, the existence of a parallel private law right would not have precluded a public law remedy: see Clark v University of Lincolnshire and Humberside [2000] 1 WLR 1988 @ 1993D. This is not a case where the contract would have had nothing to do with the public functions of the body, as, for example, might be a contract of employment (see R v East Berkshire Health Authority ex parte Walsh [1985] QB 152. Thus the claimant cannot succeed in its judicial review claim.

19. Anticipating the possibility that I might decide in this way, Miss White urged me to treat the claim as if begun as a claim for breach of contract in which a declaration was sought. Mr. Lynch accepted that RSC O.53 r.9(5), which is applicable since this claim was commenced before 2 October 2000, gives jurisdiction to make the necessary transfer, but submitted that it would be wrong to treat the hearing as the hearing of the claim. There should be oral evidence given and the opportunity to cross-examine since he would, he submitted, be able to show that any unfairness (if any) would not have affected the result. It would be unfair to deprive the defendant of the opportunity to test the evidence. Miss White submitted that all necessary material was before the court and it would be impossible for the defendant to show either that there had been no unfairness or that it would not have affected the result.

20. For the reasons I have already given, particularly in Paragraph 13, I am satisfied that Miss White's submissions are correct. The letter of 19 May 2000 speaks for itself. No cross-examination could establish the contrary. Mr. Lynch stated that the paragraph in question was inserted at Mr. Josephs' request. However, he accepted, as he had to, that Professor White would not have included it unless he was satisfied that it was accurate. To adjourn this matter would merely increase costs to no purpose.

21. In my view, the claimant is entitled to a declaration that the decision of the Appeal Committee was not in accordance with the contract between the claimant and the defendant in that there was a breach of the implied term to act fairly. Accordingly, the decision cannot stand and the matter must be reconsidered.